The Scoop on Renter's Insurance

If you live in and rent an apartment or rental home, your insurance needs are a bit different from homeowners. Many renters believe they don't need to have insurance on their property because they don't actually own it, but that is not true! We can assure you that it's worth the time and money to insure your personal belongings and protect you from medical or legal expenses in the event of an accident at the property. We've also heard many misconceptions about renters insurance, so we think this article from US News will be quite helpful and educational for both renters and landlords.

Myth #1: "I don't have enough stuff to need insurance coverage."
Since all rental properties are susceptible to a variety of damages, whether it be fire, theft or even a broken kitchen appliance, many experts say there isn't a scenario in which a tenant should go without renters insurance. But it is important to weigh the associated costs, both monetary and sentimental.

A common reason individuals avoid renters insurance is they do not think their belongings are worth the coverage. "Many renters underestimate the value of their possessions and would be surprised by how much it would cost to replace the items they have accumulated," says Emily Lyons, a Liberty Mutual property insurance expert.

If renters think they do not have enough stuff to warrant a renters insurance policy, Keith Rutman, vice president of specialty property lines for Allstate Insurance, suggests they go around their residence, room by room, and take full inventory of their belongings before making a decision. "Most people usually only think of the big-ticket items, like electronics, but if you really think about it, it's so much more in that," he says. "For example, in your kitchen, it's not only the appliances, but the towels, dishes, utensils and food, too. We find that the average renter in a two-bedroom apartment has about $30,000 worth of stuff."

Along with evaluating how much your belongings cost, it's important to consider how much you personally value those items. In some situations, how much you care about your belongs may override cost in your decision to take out a renters insurance policy.

***This second myth is so common -- we want our clients to be educated on this and know their landlord is not responsible for renters' lost expenses.***

Myth #2: "Since I am a renter, my landlord will cover property damages."
Occasionally, a landlord may partner with an insurance company to offer renters insurance to tenants, but more frequently, the insurance policies that landlords hold for their properties only protect the building itself. "After acquiring a rental housing unit, landlords change their insurance policies from a traditional homeowners policy to a rental policy, and when they do that, it only covers just the structure, not the content or any of the tenants belongings," says James Emory Tungsvik, president of the National Association of Residential Property Managers.

Even if the landlord owns appliances or other items within your rented home, he or she is not responsible for damages they inflict on your personal property. "Say you just bought a few hundred dollars' worth of frozen food and you stuck it in the freezer that the landlord owns, and it breaks down, spoiling all the food," Tungsvik says. "If you wanted coverage for that lost expense, the landlord would not responsible for it. That would be part of renters insurance."

Myth #3: "Renters insurance only covers my personal belongings."
Accidents, such as a flood in your apartment, may damage other tenants' property and can be costly. Renters insurance can protect you from these situations and help cover those unexpected costs. "For example, if your bathtub overflows and water seeps into the apartment below, damaging your neighbor's furniture or rug, your renter's policy will cover the damage up to your liability limits," Lyons says.

This liability protection can cover medical or legal expenses associated with your home. "If you are entertaining at your home and, say, someone trips over a loose rug or injures his or herself in your apartment in some way, could you afford to pay the potential medical expenses associated with that, but in the event of a lawsuit, could you pay the legal expenses as well?" Rutman asks. "A typical renters policy will cover that full range of risks that any renter could be exposed to."

Myth #4: "Renters insurance is too expensive."
Unlike car insurance or a typical homeowners insurance policy, a renters insurance plan is not a large additional monthly cost. "You are probably looking at about an additional $185 a year," says Tim LaCasse, insurance agent. "I try to tell people that for less than $20 a month, all your personal property is protected." Policy premiums can vary between individuals, providers and location, but as a whole, renters can expect to pay about 50 cents per day for a renters insurance policy.

For even more savings, many insurance providers offer multi-policy discounts to customers who add renters insurance onto an existing insurance package. On average, bundling can decrease overall monthly insurance costs by approximately 5 to 10 percent, according to LaCasse.

However, even though renters insurance is less expensive than homeowners insurance, it could still become expensive if consumers are not careful, regardless of the policy type. "You have to shop around," Hunter says. "You could pay twice as much with one company than you would if you had a policy with another.

Call First Advantage Insurance today to talk to one of our agents about the best renters insurance option for you. For a minimal expense, renters can live in their home worry-free and protected from many unexpected events like theft, fire, flooding, or accidents. It's so important to protect yourself and your belongings, and we are here to help you do just that!